While Employees’ Provident Fund, or EPF, was primarily designed for providing a lump sum to a worker at the end of his/her working life, an extremely useful feature was later added to it – a provision for a monthly pension.
The government has also taken care to raise the pension from time to time, though a lot of ground needs to be covered yet. Despite its limitations, the pension, known as EPS (Employees’ Pension Scheme) is extremely useful to the average retiree. More important, the EPFO rules have provisions for half a dozen different pensions apart from the normal superannuation pension.
Types of EPFO pension (EPS)
Early pension is offered to the subscribers who are 50-plus years of age, have completed 10 years of their service and then quit to join a non-EPF organisation.
They can either start receiving early pension at 50 or wait till 58 to become eligible for the full pension. In case of early pension, subscribers will become eligible to receive pension which is 4% lower for each year.
Widow pension
As the name implies, this pension is paid to the widow of the EPFO subscriber and children. However, the pension to the children is paid only till they turn 25, or the female child gets married. The clause of minimum 10 years of service is waived in such an eventuality.
Disability pension
Any EPFO subscriber who develops permanent or temporary disability during the period of service is entitled to this pension. Usually, pension is paid to an employee only after he/she has completed 10 years of service. But if disability strikes, only one month of service is enough to deserve this pension.
Dependent parents’ pension
If and when an EPFO subscriber dies and he/she is unmarried, the father of the deceased employee becomes eligible for pension. After the expiry of the father, his/her mother becomes eligible for monthly pension, which is supposed to continue for the rest of their lives.
Orphan pension
If an employee dies and the wife expires too, pension is paid to 2 children till they turn 25. When the elder of the children attains the age of 25, the pension will be stopped.
Nominee pension
There is a provision for every EPFO member to nominate a person to whom the pension will be paid in case he/she dies. The nomination can be done online by the employee.
A monthly pension is just the perfect combination that raises the significance of the Employees’ Provident Fund to the life of any employee. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
